What can we expect from Mucheru, Kyalo in ICT?

There is no doubt that the appointment of Joe Mucheru and ICT Cabinet Secretary and Victor Kyalo as PS is expected to provide new impetus to the ICT sector.

Why?

For the last two years, Kenya’s ICT sector has been uneasy over the rate of progress, much of which was blamed on unsupportive government officers and changing global trends.

The unease stems from the fact that seven years ago, there was a lot of hype, government support and international goodwill that resulted in competitions, grants and general investments in the sector. With this progress, Kenya seemed to be taking its place as a bonafide contender for Africa’s top technology hub.

That momentum seems to have slowed since the appointment of Dr. Fred Matiang’i as the head of Ministry of Information and Communication. The concern was that Dr. Matiang’I lacked deep understanding and appreciation of the ICT sector because he was an outsider in the ICT sector. In some cases, outsiders bring about change and development and in other cases, it doesn’t happen.

For those who know Kenya’s tech scene, these are the leading lights in policy and technology in the last 17 years; since the Kenya Communications Amendment Act took effect. Mucheru is probably well known for his role in growing Google in Africa, he was the first hire, when the content giant decided to set up offices in the region.

Mucheru and Kyalo were involved in policy advocacy and ICT sector involvement through the Kenya ICT Network (KICTANET), an online forum that allowed members to contribute to government policy, and the Telecommunications Service Providers of Kenya (TESPOK), a private sector lobby group.

However, those who have transitioned from private to public sector know that it can be tough. You need the workers at the ministry to help in delivery of promises, the supporting team usually determines the success and can sabotage or support, just like the private sector.

One of the arguments for sector challenges is lack of support for the government front, usually blamed on clueless leadership. Now you have people at the top who understand the challenges and opportunities in the sector. For once, the PS and CS are industry insiders, if they fail, then its not because of appointment of “wrong” or clueless leaders who don’t foster growth in the industry.

For those old enough to remember the “dream team”, we know that success in the private sector doesn’t always translate to success in the public sector. Success will be hinged on culture change for some of the characters who are set in their ways and may not be too happy with regime change. Kyalo has already navigated the murky waters, let us see how Mucheru deals with crocodiles.

So, what should we expect?

Leadership and direction- E.g Safaricom dominance

One of the biggest controversies relates to the issue of Safaricom dominance and the best way to support Orange and Airtel to turn around profits and find a way to compete with Safaricom.

When asked about this topic by the parliamentary vetting committee, Mucheru promised to work with the Communications Authority and explore ways to help the other telcos to be more competitive. He mentioned infrastructure sharing as one area that could promote more competition.

He was quick to mention that Safaricom is valued at $ 5 billion, which is lower than Whatsapp ($19b) and Uber ($60b). Of course there is no correlation between market capitalization and market dominance but I got his point to be that we must grow more billion-dollar companies before curtailing their growth. The fact that the committee didn’t pin him more means that they were either clueless or will allow Mucheru to bullshit around, as long as he can drop big names and jargon.

The CA and Matiang’I have been at odds with Safaricom, writing to parliament and promising to implement measures that cut Safaricom’s growth instead of helping others competing and catching up. Mucheru had constructive suggestions, let us see if he will implement/

The problem is that whether we like it or not, Safaricom supports other smaller companies and in cutting its growth, the government is eventually cutting the growth for other smaller companies. For instance, Mpesa depends on smaller local software developers to innovate, if the revenues drop, this jobs go to India, where the costs are way lower. Of course, market forces could force similar results but its better than government doing it. That is why this fight makes more tech companies jittery.

It will be interesting to see how Mucheru handles this balancing act between the government and its largest tax payer.

Leadership and direction- Blockchain, bitcoin, etc

Every time new technology comes up, there is usually apprehension from the incumbent; mainly it borders on the economic effects but is usually masked as public interest; to a larger extent that is…… for instance, when Mpesa entered the market, banks complained to the Central Bank, arguing public interest and demanding that Safaricom be licensed as a bank and comply with all the rules if it wants to handle money. It was a convoluted battle that Safaricom finally won and banks had no choice than to partner.

Countries like Japan, Tunisia and many in the EU are exploring how to use blockchain. It will probably take another 10 years for it to go mainstream. You can read about bitcoin in Kenya here. CBK has already cautioned the public on its usage.

In this respect, Mucheru and Kyalo should offer leadership and insights on the best way for Kenya to go. Whether CBK recognizes the opportunities provided by blockchain or not, will be down to the approach and guidance from the ICT ministry.

Restoring the vibrancy

There was a time Kenya’s ICT sector was vibrant, with competitions here and there, which provided opportunities for new ideas and career “app competition winners”. People say that the tech ecosystem doesn’t benefit from competitions but for the young guys from school, it can offer some motivation and a way to set up.

Its funny how some people vilify app competitions, even if they are well known or found their footing in those competitions. I recently read some WhatsApp messages from some guys saying how competitions spoil the industry. The irony is; the two loudest characters have won the most money and were a mainstay in those competitions. They ran professional start ups; being know just by pitching in those competitions.

For the people entering Kenya’s tech space now, you missed a boom of unaccounted government money, forget about the $1,000 Barclays is giving, this was money 🙂

There is so much we can expect, but this is all I can think about for now; read what Mucheru promises in this article.